Correlation Between Air New and Super Retail
Can any of the company-specific risk be diversified away by investing in both Air New and Super Retail at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Air New and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and Super Retail Group, you can compare the effects of market volatilities on Air New and Super Retail and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Air New with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Super Retail.
Diversification Opportunities for Air New and Super Retail
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Super is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail Group and Air New is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Air New Zealand are associated (or correlated) with Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Air New i.e., Air New and Super Retail go up and down completely randomly.
Pair Corralation between Air New and Super Retail
Assuming the 90 days trading horizon Air New Zealand is expected to generate 0.61 times more return on investment than Super Retail. However, Air New Zealand is 1.65 times less risky than Super Retail. It trades about 0.01 of its potential returns per unit of risk. Super Retail Group is currently generating about -0.21 per unit of risk. If you would invest 48.00 in Air New Zealand on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Air New Zealand or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Super Retail Group
Performance |
| Timeline |
| Air New Zealand |
| Super Retail Group |
Air New and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Super Retail
The main advantage of trading using opposite Air New and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, Super Retail can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Super Retail will offset losses from the drop in Super Retail's long position.| Air New vs. Bio Gene Technology | Air New vs. Computershare | Air New vs. Hutchison Telecommunications | Air New vs. BTC Health Limited |
| Super Retail vs. REGAL ASIAN INVESTMENTS | Super Retail vs. Qbe Insurance Group | Super Retail vs. Wt Financial Group | Super Retail vs. Kkr Credit Income |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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